Horizontal Enterprise Integration Remains a Priority for Many CIOs

For all the good work that has been done over the years through process reengineering and implementation of enterprise systems, the reality is that most organisations remain siloed. In many corporations their divisions and business units operate largely autonomously with little or no sharing of processes, systems or solutions. Yet today’s customers expect the introduction of faultless new products, rapid order fulfilment and responsive customer service. They do not care — nor should they need to — about how their supplier is organised internally. Even if the functional silos are operating efficiently and meeting their Key Performance Indicators, it is the performance of the cross-functional processes that ultimately determines the customer experience.

The approach of many organisations to horizontal integration has been to create back-office shared service centres that provide a range of ‘services’ to customer-facing business units. Some of these have worked exceptionally well, but many less so because they have not addressed the fundamental problem of diversity. It is impossible for a shared service centre to provide ever-increasing superior service at lower cost if the ‘requirements’ of its customers are so diverse. Equally, the argument should not be for total standardisation, and one size does not fit all. The goal should be a greater degree of common and shared solutions, business processes and systems whilst recognising the need for authentic differences. The key words are authentic differences, and not differences that have evolved over time with no benefit to the customer.

My colleague Michael Earl, and his thought partners James Cash and Robert Morison, argue in their HBR article Teaming Up to Crack Innovation and Enterprise Integration the need for Enterprise Integration Groups (EIGs) whose role is to establish the architecture and management practices essential for business integration. Furthermore they make the case that the EIG should:

Manage the corporate portfolio of integration initiatives

Serve as the corporation’s centre of expertise in process management and improvement

Provide staff to major business integration initiatives

Be responsible for enterprise architecture

Anticipate how operations might work in a more integrated fashion in the future.

Whether the creation of an Enterprise Integration Group is the best approach for your organisation or not, one thing is for certain, there are significant benefits to be gained from driving for greater horizontal integration.

If you would like a copy of the HBR article that triggered these thoughts, click here.